Health care spending

Health Care Expenditures and You. Know Your Numbers.

Health Care Expenditures and You.

Know Your Numbers.

As a Valentine’s Day gift to health policy types, the economists in the Office of the Actuary at the Centers for Medicare & Medicaid Services (CMS) published the National Health Expenditure Projections for 2017–26 and Health Affairs published an insightful analysis, as well. The storyline has been pretty consistent for the past few years and looking forward to 2026, several trends are intact:

The U.S. population is aging, which is pushing health cost trends higher.
Medicare spending is growing faster than private spending as Baby Boomers age out of private insurance plans through their employers and into Medicare.
A “higher share of aged and disabled enrollees” continues to contribute to faster growth in Medicaid spending.

The topline is that health spending growth, provided there are no significant policy changes, is expected to increase around 5 to 6 percent per year from 2017-2026. If this is estimate is correct, by 2026 health care will account for nearly 20 percent of the U.S. economy, compared to 17.9 percent in 2016. Digging deeper into the estimates reveals some items that may not have crossed your radar yet:

The rate of 5.5 percent per year from 2017-2016 is much less than the 7.3 percent average increase per year the U.S. experienced from 1990-2007.
Prices for medical goods and services saw historically low growth rates of just 1.1 percent per year between 2014 and 2016, and will average 2.5 percent per year in 2017–26.
The projected price increases for medical goods and services at 2.5 percent is much lower than the 3.3 percent average annual growth rate in 1990–2007.

These low price increases might seem surprising if you rely on general news reports, but it is really just a matter of thinking about which numbers are being reported, by whom, and about which group of people. For example, earlier this month, Express Scripts, a pharmaceutical benefits manager with more than 34 million members, published their annual Drug Trend Cost Report announcing a Record-Low Increase in Rx Spending in 2017. “Commercial plans saw the lowest increase in drug spending in 24 years – just 1.5%, compared with 3.8% in 2016,” explained the report. In Medicare, “total per-person spending increased 2.3%, with diabetes leading all classes.” In Medicaid, “total per-person spending increased 3.7%, with HIV leading all classes.” For the health insurance exchanges, “total per-person spending decreased 3.3%.” These numbers are just about drug spending.

If you look at yet another set of data, you get yet another picture. The Health Care Cost Institute (HCCI) 2016 Health Care Cost and Utilization Report explained, “Total spending per person is now growing at faster rates than prior years, with 4.6% growth in 2016.” The HCCI report is based on claims in employer-sponsored insurance sponsored by Aetna, Humana, Kaiser Permanente, and United Healthcare for 39 million members. The report produces a “per-person health care spending estimate” that only includes the amount the insurance companies paid and the cost-sharing amount the patients paid for those services. It does not include the premiums that consumers or employers paid, however.

The HCCI report agrees with the Express Scripts report, however, by noting, “In 2016, increased spending on outpatient services was the biggest contributor to the annual growth in total spending. This is a change from prior years. In 2014 and 2015, prescription drug spending was the biggest contributor to total spending growth.”

You can see that different reports, written for different audiences and looking at different cuts of the data, reflect different truths – and all are based in fact.

One Thing is For Sure, Patients Aren’t the Problem

The State Of Health Care Today: How Physicians, Consumers, and Employers View Health Care Costs, Outcomes, and Reform Efforts, a survey of more than 600 physicians, 500 employers, and 5,000 consumers published in January 2018 by Leavitt Partners, explains these dueling data sets fairly well, though my guess is that was not their intention. The report explains, “In general, physicians, employers, and consumers agree that the health care system requires change; however, they disagree on what changes are needed, who is responsible for making changes, and which reform efforts hold the most promise.” This makes sense because most people’s experience and understanding of health care is personal. It’s about my health care provider, my insurance coverage, my health care costs.

As this chart from the Leavitt report shows, when asked who or what is responsible for the problems with the U.S. health care system, patients mostly blame the government, physicians primarily blame insurance companies, and employers blame both government and insurance companies nearly equally. Patients seem to have escaped blame, however, at least for the more than 7,000 people in the Leavitt survey. Keep that in mind the next time you see a news report about health care expenditures and a recommended policy change. Know your numbers. It might change your policy life!

Physicians Missing Opportunities for Communication to Help Patients Reduce Costs, Duke Study Finds

By M2|2017-10-09T01:53:50+00:00May 3rd, 2017|Health care spending, Uncategorized|

Physicians Missing Opportunities for Communication to Help Patients Reduce Costs, Duke Study Finds

Health care providers have an important role in helping patients navigate the restrictions health plans put in place that may drive high out-of-pocket expenses. Clinicians could help patients determine whether lower price interventions might work, for example.

To help patients make health care choices that are informed by knowledge of expected costs, some experts have recommended routine physician-patient communication about out-of-pocket expenses.

However, “there is very little research assessing how often, or how well, doctors and patients discuss health care costs during clinical encounters,” Peter Ubell, Duke University, et al., note in a study published in Health Affairs.

To address this gap, the authors studied audio recorded clinical encounters, and found that “physician-patient spending conversations did not always enable patients to successfully navigate out-of-pocket expenses.”

In fact, some physician behaviors “stand in the way of helping patients make informed decisions about ways to potentially lower their out-of-pocket spending,” the authors find.

Indeed, as noted below, the authors identified a range of physician behaviors representing “missed opportunities” to address patients’ cost concerns, from dismissal of such concerns, to physicians being too quick to accept patient’s dismissals of their own concerns (for examples of actual physician/ patient conversations demonstrating some of these missed opportunities, see accompanying chart below).

Researchers reviewed 3,000 physician-patient interactions for management of breast cancer, depression, and rheumatoid arthritis.

Two broad categories of physician behaviors led to “missed opportunities to reduce out-of-pocket expenses”-

Missed opportunities to address patient’s financial concerns – For example:

Failure to recognize potential financial concern: “For patients to productively discuss out-of-pocket spending with their physicians, they need physicians to recognize that they have financial concerns. However, patients do not always state their financial concerns explicitly,” the authors say.
Distracted from patient’s financial concerns by frustration with the system: “When physicians discuss health care expenses with patients, they sometimes spend considerable time complaining about the systemic factors contributing to high out-of-pocket spending. Occasionally, voicing those frustrations seems to distract them from exploring how to reduce patients’ expenses.”
Dismissal of patient’s financial concerns: “Even when physicians pick up on and acknowledge patients’ financial concerns, they sometimes dismiss such concerns before exploring whether it is possible to reduce patients’ financial burden. For example, in one interaction, a patient explained that ‘[I] cannot take my pills, because there is now a copay.’ She mentioned that she had ‘zero income,’ to which the physician replied, ‘That’s what happens, yeah,’ without addressing her inability to pay for her medications.”
Hasty acceptance of patients’ dismissal of financial concerns: “Sometimes, patients express financial concerns to physicians, and then they, the patients, dismiss those same concerns. When physicians readily accept such dismissals, they miss out on opportunities to find out whether such concerns are legitimate.”

Limited resolution of patient’s financial concerns – For example:

Assuming “coverage” means full coverage: “Many insurance plans do not fully cover services but leave patients with copayments or coinsurance,” the authors note. “When physicians mistakenly assume that ‘coverage’ means full coverage, they might unwittingly expose patients to burdensome out-of-pocket spending.”
Assuming generic medications are affordable: “In recent years, consolidation among manufacturers has led to significant increases in the price of some generic medications,” the authors note. “Even absent such price increases, the cost of generic medications can burden those patients who are stressed to their financial limit. But physicians do not always recognize that ‘inexpensive’ generics can be unaffordable for their patients.”
Assuming copayment assistance programs and coupons resolve financial concerns: “Sometimes pharmaceutical companies create programs to help patients pay for expensive medications. These programs do not always eliminate all out-of-pocket expenses. And not all patients who seek such assistance receive it.”
Temporizing financial burden without discussion long-term solutions: “Sometimes physicians make earnest efforts to address patients’ financial concerns but focus on temporary solutions without discussing steps necessary to yield long-term financial relief. Physicians offer free samples of medications to treat patients’ problems even when such samples only delay the day when patients will face significant expenses. In some cases, in fact, the free samples are expensive drugs, and use of the free samples might distract physicians from trying less expensive alternatives first. Other times, physicians turn to short-lived drug discount cards or coupons,” the authors say.

“Many physicians want to help relieve patients of their financial burdens, to increase the likelihood that they will receive prescribed interventions and improve their overall quality of life. To achieve this goal, physicians need to recognize when their own behaviors interfere with these efforts,” Ubell, et al., say.

“For example, when patients are burdened by the expense of prescribed interventions, physicians should consider whether there are less expensive alternatives. When the best solutions are short in duration, it behooves physicians to make plans to find longer-term solutions. And when patients raise and then dismiss financial concerns, physicians should take a moment to assess whether such dismissals are warranted.”

“Many health care policies are ultimately played out ‘at the bedside,’ by influencing the way doctors and patients make medical decisions,” the authors say. “In the case of policies promoting health care consumerism, many patients are faced with important decisions about whether the benefits of health care interventions justify their financial cost.”

As this study demonstrates, patients often are ill-equipped to make medical decisions and may require additional information to do so. One way to address this issue may be to offer additional training for physicians, in order to help facilitate the conversations with patients about their financial concerns. Alternatively, physicians could consider adding a staff member who could be a resource for answering financial questions from patients.